The AMF has issued a position and an instruction dated 30 June 2014 clarifying the rules for marketing AIFs (Alternative Investment Funds) and UCITS (Undertakings For The Collective Investment Of Transferable Securities) that derive from Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 (the AIFM Directive), as transposed into French law in Order 2013-676 of 25 July 2013 and decree 2013-687 of 25 July 2013.

1. Defining the concept of marketing and exemptions

Position document DOC-2014-04 clarifies the concept of the "marketing" of units or shares in UCITS and AIFs in France as defined in the AIFM Directive. The AMF has opted for a broad interpretation of marketing, defined as "a direct or indirect offering or placement, at the initiative of the manager or on behalf of the manager, of units or shares of an AIF or UCITS it manages to investors domiciled or with their registered office in the EU".

The AMF has clarified this definition in three ways:

  • The AMF states that an "offering" or "placement" or AIF or UCITS units or shares consist in "presenting them on French territory using various means [such as advertising, canvassing or consulting], with a view to encouraging an investor to subscribe for or purchase the unit or share".
  • The market authority also stresses that AIF or UCITS units or shares will be considered to have been marketed in France as log as the investors targeted by the marketing effort hold shares or units in those AIFs or UCITS.
    • It provides a negative definition of the concept of "marketing" by excluding the following from the category:the purchase, sale or subscription of AIF or UCITS units or shares in response to an unsolicited inquiry from an investor pertaining to a UCITS or AIF specifically identified by that investor, insofar as this is allowed for such investor
    • the purchase, sale or subscription of AIF or UCITS units or shares as part of a manager's authority to manage assets for third parties, insofar as these are authorised financial instruments in the investors' portfolio;
    • the purchase, sale or subscription of AIF or UCITS units or shares as part of the financial management of an AIF or UCITS, insofar as such units are shares are authorised assets in that AIF or UCITS.

The AMF also clarified what rules apply to AIF and UCITS marketing in France depending on where the funds are located (in France, in another EU or EEA Member State, or a third country). For AIFs, the market authority also made distinctions based on where the asset management company is established. Lastly, the AMF set out different requirements for marketing AIFs depending on whether or not they were using the European passport.

2. Implementing conditions

Published at the same time as position DOC-2014-04, instruction DOC-2014-03 gives a detailed account of the procedure for marketing AIF units or shares in France depending on whether the AIFs are:

  • established in France or another EU Member State and managed by an asset management company authorised in France in keeping with the AIFM Directive;
  • established in France or in another EU Member State and managed by an asset management company authorised in another EU Member State in keeping with the AIFM Directive;
  • established in a third country and/or managed by a fund manager established in a third country.

The information given in the AMF instruction includes the content of the notification or authorisation file to be submitted to the AMF, depending on the circumstances, and the deadlines for the AMF to process requests: twenty business days for EU AIFs managed by management companies in the EU (including France), and two months for AIFs from third countries or whose fund managers are in third countries.

As a last point, fund managers wishing to market AIFs from third countries without a European passport must appoint a centralising agent and a depositary established in France. Fund managers that are themselves established in a third country must demonstrate that they abide by all the provisions of the AIFM Directive applicable to French asset management companies (in practice, a potentially difficult standard to meet).